CONCRETE COMPANY CRH has bought Pavestone, a major US producer of paving and decorative stones, for $540 million (€348 million) in cash, writes Laura Slattery.

The deal, which is subject to regulatory approvals, includes an additional deferred sum that will be payable by CRH if future increases in profitability are met.

Pavestone, which has its headquarters in Dallas, Texas, operates a network of 18 concrete paver plants, with decorative stone bagging plants at 14 of these locations.

Its adjusted earnings before tax and writedowns came to around $65 million last year on sales of $368 million, giving the company a trading margin of 17.7 per cent, according to Davy Research.

CRH said Pavestone's operations complemented its existing retail business, the Architectural Products Group (APG), which operates from 30 paver plants and 11 bagging plants in the US.

The acquisition will give APG a broader footprint in concrete landscaping products, which include pavers, retaining wall products and patio products (collectively known as hardscapes) as well as bagged stone.

CRH chief executive Liam O'Mahony said the deal would enable "profitable growth and an improved ability to service our core professional and DIY hardscape markets".

Davy Research analyst Barry Dixon said the deal would give CRH good opportunities for synergies in areas such as purchasing and logistics. He added that Pavestone appears to be "significantly more profitable" than CRH's APG business, which is estimated to have a margin of 13 per cent.

NCB's John Sheehan said: "While sentiment towards the US residential and related sectors remains weak, this raises the group's exposure to a segment which has delivered strong returns over many years and where continued medium-term growth is projected."